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Dick Bove 8, S&p 6, America 6, Keith 5, Us 5, Obama 5, Sarah Palin 5, Madoff 4, David Limbaugh 4, Bernie Madoff 4, Citi 3, Aetna 3, Detroit 3, Dan 3, Alaska 2, Citi Corp. 2, Danielle 2, Danielle Hughes 2, Cialis 2, Pelosi 2,
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  CNBC    The Kudlow Report    News/Business.  

    August 11, 2009
    7:00 - 8:00pm EDT  

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tonight on the "kudlow report." financials let the market down 100 points today. dick bove turned bearish. he will be a special guest this evening. i have to challenge my friend because i still say, find a bank you hate and buy it. president obama in a health care town hall in nancy pelosi today. he talked death boards and the post office. take a look at one of his more mystifying statements. >> people say, well, how can a private company compete against the government? if you think about it, ups and fedex are doing just fine. right? no, they are. it's the post office that's always having problems. >> well, yeah, the post office, run by the government. we'll debate all this with a
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power packed political panel. then super crook bernie madoff's number two man is singing. are we finally going to find out where the money is and who are the family accomplices. fasten your seat belts, everybody. t "the kudlow report" begins right now. good evening, everyone. i'm larry kudlow. welcome back to "the kudlow report" where we believe free market capitalism is the best path to prosperity. we'll look at president obama's health care town hall meeting today. before we get to that. let's look at the 100 point pullback in the stock market led by banks. we'll get to bank analyst dick bove in a moment and tell us why he pulled the plug on banks which resulted in the sell-off. first a look at the pullback in total, could be a great opportunity for investors to get back in. let's get to sharon epperson for
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the full stock market central report. hello, sharon. >> it shouldn't be a surprise we had a little weakness today ahead of the federal reserve tomorrow and after a tremendous run-up in stocks over the last four weeks. the modest sell-off at wall street was really thanks to bank stocks and dragging those broader markets lower. it wasn't so bad. dow cut its early losses in half. financials weak but finished off lows. and energy stocks continued to lag. it really was comment from dick bove we will hear from in a few minutes, that caused the bank stocks to skid. he said banks were running on fumes despite a recent rally and doesn't anticipate improvement in the second half. bank of america, travelers, chase, american express, ge were all under pressure. shares of cit said it would file for bankruptcy if it couldn't secure reliable debt financing. we had energy shares weaker as well. oil prices tumbled below $70 a
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barrel. retail stocks held up well after earnings reports due out later this week, target, wal-mart, the gap all posted gains, so did macy's which releases its quarterly report before tomorrow. >> sharon, thanks. you used to cover the energy beat, you still cover the energy beat carefully. energy stocks are in their own pullback. do you have any thoughts on that. >> we are in this range we've been in. we could see a pull back to mid-60s or $62 a barrel or so. there is this concern are we in a recovery and if so, what does that mean for energy demand? we're not seeing that. we're seeing a lot of increases include supply, and that's what we're expecting tomorrow when the energy department reports. >> they report the energy tomorrow. you bull or bear on energy prices? i hate to put anybody on the spot but you know the beat. >> i do know the beat and i don't see the demand for them to necessarily go higher. that said me talking with my fundamental hat on.
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when you look at what's affecting energy prices, it's the dollar. >> king dollars, i was just going there, you took the words out of my mouth. king dollar is holding down energy prices. >> if the dollar weakness, we could see prices regardless of fundamentals go up. >> i'm sure the treasury and fed will protect the value of our money after all we all own a little money. thanks. i appreciate it. the biggest drop in quite a while, lost 3.4% today, and the guy who may responsible, dick bove, this morning he abandoned his bullish on banks and said banks are running on fumes, end quote not batteries but fumes. and danielle hughes, divine capital founder and ceo. i love that divine. let me go to my pal, dick bove first. bank earnings will turn south in the second half of the year and
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now's the time to snell. >> let me give you some statistics. marshal nobly up 100%, bank of new york up 200%, state street up 300, suntrust up 300%, citigroup up 400%. bank of america up 900%, all from the lows they paid over the past three to six months. >> the lows were the seventh to eighth level of dante's inferno. these comparisons are a little misleading. >> they certainly are in that sense. i have to tell you, when stocks make a move of that magnitude, the only thing you can see over the next couple of quarters is virtually all the companies i mentioned for you except for state street and bank of new york are going to lose money in the third and fourth quarter. >> let me focus on that and i want to get danielle to weigh in. why are they going to lose money? you and i talked about that a lot. you have a very steep upward
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treasury curve very bullish for banks. that curve is anchored by zero short term interest rate, which ain't going to change atom's federal reserve meeting. i have argued even a banker can make money under those interest spread conditions. therefore, you can grow your way out of the toxic assets. what made you change your view on that point? >> on that point, you know, the problem the banks have their cost of money can't go down any lower and the yield on their assets is too low. in other words, essentially, the cost of money, which is deposit, banks are paying 10 basis points, 14 basis points for money. they can't get that cost any lower. at the same time in time, because interest rates are so low, they can't get a reasonable yield on the asset side. so essentially there, not getting enough spread. in addition, they're not generating enough loans. there are not enough good lending opportunities in the economy at the moment. >> don't they make it up with the securities operation as they had in the last couple of
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quarte quarters. >> they dine some respects. >> the stock market has been bullish, so far. >> the big -- >> bonds have been really bullish, another thing, make a lot of money on bonds, you can own a corporate bon at 7 1/2%, own a mortgage backed bond and own a junk bond and your financing is virtually zero! >> that's true, but on the other hand, you still have to deal with these other loan losses, the big issue facing them temperature, they can't shake the problem in the residential commercial sector, industrial loans, credit card loan, everything except auto loans getting better, the only category getting better? cash for clunkers. >> danielle hughes, thank you for being patient. what is your response to dick's turn. >> it's interesting. my argument is fundamentals don't matter in this market. they haven't mattered especially in banking or financial sector. no matter what we keep saying,
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the trading market has moved up and up and up. even though a lot of these companies have moved down significantly, it doesn't matter, everybody is making money. money has been free flowing from everywhere. cars, fed -- >> pumping it out. given that point of view, do you think today broke the psychology, dick bove's call you lost 3 1/2% on banks, did it break that psychology or do you come in and buy the pullback? >> i'm of two minds. that psychology has not broken with everything being thrown ate except a lot of traders on vacation this week and next week and the play has not been there. >> what are you going to do about this conundrum? are you going to buy these banks back. >> everything got clocked today. did not buy anything today but over the past couple of weeks i have been buying names. i bought citi personally and for clients, i bought hbc, one of the best positioned banks out
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there. there's a lot of, i wouldn't say value in the sense i'm buying it because of fundamental, i'm buying names because there has been traction, psychological feeling of things are going to get better, feeling better. could that turn. >> on a dime. >> i feel a lot better. dick bove, your note indicates you are still a long term bull. i want to ask you your favorite bullish picks long term and please define the time horizon long term. >> i would say stay out of them the remainder of the year and start buying towards december, january of this year. that's the way i would position it. the reason i'm long term bullish, ultimately the loan losses will come down and the issues you mentioned will take hold. right now, i'm afraid to step in when i have loan losses and losses in general facing me. the bank i would buy is actually the bank danielle just
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mentioned, citigroup, my favorite stock. >> this is a government bank, government owned bank, citigroup. i don't want to be too stark, not goldman sachs, not wells fargo, none offer the regionals, you want to go to citity. you think they have a great business sfloplan? citigroup had -- was broken into two pieces by the government. citi corp. from the 1990s and citi holdings that everything cohorts put in. ultima ultimately citi holdings will be gone. left with citi corp., you have a strong vibrant company i think will be worth a lot of money. >> we'll leave it there. an interesting point. you would be buying it now.
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>> i'm buying it now. in a sense, there's nothing wrong with speculation, good and bad. it is great. it is a $3 number. i think a lot of investors and money managers alike say it's a $3 number despite what we're seeing and fundamentals. >> how high can it go from 3. >> i saw it go to 8 this year, saw profits there and bought it back again. >> it will go to what, 8, 10, 12, 15. >> 12. >> i heard a 12 do it. bid higher? it sounds nice. >> for people not as astute and sophisticated professional traders, would you tell the ordinary investor to buy banks on this pullback? >> i don't want to make that kind of comment. i don't recommend to ordinary investors, however, you have to play this market, it doesn't matter what's happening, up or down. >> you like the action? >> i love the action. >> dick bove, thank you so much. dick, you're a powerful guy, man. one little whisper, and the
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whole thing fell apart. and danielle hughes say she will stay up with it. and coming up, bernie madoff's number two man may be spilling the beans. will we finally find out where the money is and were there accomplices. and president obama tries to explain death panels to the members of the town hall. we'll have one heck of a debate about the death panels and why did he talk about the post office? stay with "the kudlow report." i'm not here to talk about the post office but say find a bank you hate and buy it.
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this is humiliating. stand still so we can get an accurate reading. okay...um...eighteen pounds and a smidge. a smidge? y'know, there's really no need to weigh packages under 70 pounds. with priority mail flat rate boxes from the postal service, if it fits, it ships anywhere in the country for a low flat rate. cool. you know this scale is off by a good 7, 8 pounds. maybe five. priority mail flat rate boxes only from the postal service.
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well well convict fraudster bernie madoff seems to be
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singing. >> hello. they were calling mr. frank d. pa de-pascally a flight risk after pleading guilty to mail and securities fraud. the 52-year-old dip srascali wa takeen off despite the attempts to get an agreement. he has been cooperating since december and his continued assistance would be easier if he wasn't jailed. during the two hour hearing, a sometimes emotional dipascali described how he and madoff defrauded investors and saying since the late 1980s and early 1990s, he falsified investors statements and statements for audiers and at the behest of madoff lied in 2006 to throw
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them off track. the money was never invested but instead sent to bank account handled by madoff. he said he knew what he was doing was criminal and thought madoff might have other assets to pay investors. he acknowledged his apology about this catastrophe may mean nothing and hopes the work he's doing for the government may end up meaning something down the lo road and help unravel the $65 billion ponzi scheme but now that work has to be done from jail. >> thank you. for staying with us. you have tough large, defrauded falsified, lied to the sec. the guy's in trouble. will we get new leads about where the money is? >> reporter: i think certainly he suggested that in this is plea statementhat the money went to bank account handled by mr. madoff. he may have knowledge from that. we don't know the exact details,
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a broad statement but suggests he might have idea as to where there are additional funds. >> secondly, the whole issue of family members, mary, is it your expectation or expectation of legal people we will finally learn the whole story there? >> reporter: well, of course, that's the hope. i think when you were suggesting family members, what does this mean for bernie madoff's brother, peter, his wife, ruth, there was no mention of their names from the statement today, again, who worked for the company 33 years and last served as cfo. he only mentioned others and did not name any. that's something we have to wait and see. >> how does this play out? he's cuffed and gone to the poky, what's the next step in your view? . >> reporter: interesting the judge said he rejected the bail without prejudice. that means if the prosecution and defense came up with another bail agreement the judge would find more fitting, possibly mr. dipascali could be removed and
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allowed to stay, i guess you could say under house arrest or whatever new terms until he is sentenced. for now, we wait for sentencing for him from here on in. >> presumably the prosecutors are all over this guy, right? >> reporter: the prosecutors are over him. they have an interest getting him to cooperate and have an interest maybe putting together a new bail agreement if it's easier for him to cooperate outside the jail agreement. they've been talking with him since last winter and say he's been very helpful to the government and would like to keep it that way. >> we appreciate it. next up, president obama talks about death panels at a nancy pelosi town hall today. we have an all-star group ready to debate when we come back. how much trouble is the plan in? the stock market is saying the plan is dead in the water. "the kudlow report" ill, right back. announcer: what's your cialis moment?
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may include headache, upset stomach, delayed backache or muscle ache. to avoid long term injury seek immediate medical help for an erection lasting more than 4 hours. if you have any sudden decrease or loss in hearing or vision stop taking cialis and call your doctor right away. announcer: today, you have options: cialis for daily use or 36-hour cialis. ask your doctor if cialis is right for you, so when the moment is right, you can be ready. the furor over health care continues with raucous town hall meetings. president obama held one in nancy pelosi and talked about death boards. the rumor that's been circulating a lot lately is this idea somehow the house of representatives voted for death panels that will basically pull the plug on grandma because we
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decided it's too expensive to let her live anymore. i am not in favor of that. just, i want to -- wasn't to clear the air here. >> well, pull the plug on grand mampt i'm surprised he went there. can we put this sarah palin thing up before we introduce our panel. i think they have a strong opinion. a lot of this death stuff comes from a blog posting by former governor of alaska. a facebook posting. now, i think she softened her message a bit and wrote on sunday, we must stick to a discussion of the issues and not
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get sidetracked by tactics that can be accused of leading to intimidation or harassment there. is a hint here of a palin-obama face-off, if you will, which really juices this up even more. let me bring in my highly distinguished panel. kelley ann conway, republican pollster. leslie marshal is back. she hasn't been with us in so long, great to see her, and cnbc contributor kenneth boykin, a former clinton white house aide and columnist, david limbaugh. great to see, you kind of like old home week. i guess president obama is the uniter after all. i'm glad we got some laughter out of that. this business about the death boards and his post office statement. we have to get the post office quote on the screen. what was your impression of mr.
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obama's format. >> this is no longer a hospitable format. he thinks he's on the campaign trail. there's no more clinton or bush to blame. it's his health care plachblt i was completely astonished by the statement of the post office. i would think as the president of the united states he is essentially head of the post office. he criticized them and said they're the ones who have problems, the private sector u.p.s. and fedex do well. should that mean we only get sick monday through friday on obama-care? >> do we have that post office quote? can i run that again or cooking it up again. keith, was that you butting in. >> you guys are taking one little comment out of context. he's talking about the importance of private and public competition, republicans want when it comes to school choice. they talk about health care, they don't want that. reality, these town hall
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meetings are not about health care, about stopping president obama. you have sarah palin talking about dealt panels, when this was a voluntary council proposed from a representative from georgia, we're not talking about the actual conversation here. >> let me play a sound bite, mr. obama reminiscing about the post office. >> people say, how can a private company compete against the government? if you think about it, u.p.s. and fedex are doing just fine, right? no, they are. it's the post office that's always having problems. >> leslie marshal, i want to try to understand this, president obama is a very bright man, i've never take than from him nor i do intend to. the u.p.s. and fedex and the private sector that are doing great and the post office run by the government that's not. isn't this an odd defense of his
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government insurance plan? >> i don't know how odd it is, larry. i was listening to an interview with the head of the post office whose name escapes me. he is defiant the post office isn't technically a part of the federal government as workers will tell you that aside, i think he is accurate in that when you hear you have to have branches closing on saturday, et cetera and u.p.s. and fedex not having problems, being realistic, not shooting his government, being a real list telling the american people what is a reality sometimes between government and private sector. the government certainly has to bail out some of the private sector on wall street. this is a different venue. again, you have to look at the context in what he's talking about. when he's talking about health care, we complain when for 40 some cents we can send a letter from california to new york, i think that's a pretty good deal frankly but there are cuts at the post office there aren't at u.p.s. and fedex the reality.
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>> i heard a lot of presidents defend the post office. obama didn't really do that. somehow, i don't think he got through what he intended to get through either on the so-called death board, allegation of death board and post office versus fedex, did he do himself any good today, dave limbaugh. >> i don't think so. obama is so disingenuous every time he opens his mouth he digs deeper. didn't talk about subsidizing the federal government, didn't talk about page 16 of the plan, where once someone loses their employment insurance he can't get private health insurance. he didn't talk about his stated goal has been to have a single payer system. he wanted to do it a little bit furtively and deceptively by saying we'll start out with universal care and gravitate toward it in 15 to 20 years. they can't be honest about what they're doing. they will stack the deck in favor of the public option, shift costs to make it look like
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the public option is more efficient than it is and slowly crowd out the private sector. it's inevitable that's what they want to do. why are we fooling ourselves talking about it. that is our goal. >> you're making up stuff that is not true. >> quit saying we're making stuff up. we're not making stuff up. >> you are. you just talked about barack obama proposing a single payer health care system. he has never proposed such a thing. that's exactly what the liberals like myself would like him to propose. >> he did. did you not read his statement in 2003 when -- >> this is 2009. >> when linda douglas said it was taken out of context. >> this is 2009. >> he has not changed his position. >> one at a time. i appreciate the debate. keith, you finish. >> the president has wisely recognized he can't push his single payer system. it's not going to fly right now, i think it's a good idea. >> not that he doesn't want it,
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treat the can't get away with it quickly enough. >> this is the problem, we have people carrying guns into these meetings and supposed to be talkin about health care. >> come on. >> let me finish. when will we have a civil discourse about the real ideas. >> i don't know, keith, that one, this is about freedom and opposition and dissent. this is a rough issue. rasmussen polls out, 39% of seniors support this, 56% of seniors against it. >> they read the bill. more than their congressman. >> the death bill is in this. if the democrats lose seniors, they're finished. if democrats lose seniors in election, they're finished. medicare cutbacks, something seniors rely on, a fairly popular program. seems like the cost reductions are all coming out of medicare. politically will this sink the whole democratic party if seniors turn against them?
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>> it could. that's why you will see democrats break rank with him when it comes time to vote. they're up in 2010. seniors don't like a lot of choice and change. dinner is at 4:00 everyday, already figured out medicare. i watched the president, didn't understand what he was talking about, the $188 billion they could take out because it's a free give away right now to one company and get to take it out and reallocate that. can you imagine what you do with $188 billion. when seniors hear you're touching medicare, they willfully the way they did in '96. >> medicare is a government program and that's not socialism, is it? >> it is socialism. it is socialism. >> keith, my friend, to respond, medicare of course it is a very popular one. also about $40 trillion in the hole going out 50 years, that's why i wondered the post office metaphor may not have been your man, mr. obama's best play here.
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leslie marshal, if i knew medicare was deep in the hole and i was going to cut costs to medicare and knew elderly people were leaving off the reservation on this would you have gone where president obama went? that's the part that mystifies me, his presentation today. >> yes, i would. i think david was saying he's dis disingenuous. he's certainly being genuine, he's answering the questions posed, answering the questions america is putting out through programs like this, radio programs like mine and answering questions seniors want. i don't know any seniors turning away medicare, and i can understand why seniors are concerned about cuts mentioned. what plan are we talking about? the house plan? senate plan? there is not one plan. >> we will come back and look at this. i will show you interesting stock market stuff that suggests the stock market does not think the government insurance plan will ever go through. later, big muscle cars made
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detroit famous. the new bailed-out general motors unveiled a new look for u.s. car makers today. little green go-carts. they're a little bigger than that. little battery driven go-carts. coming up, today's pullback could be a good buying opportunity. how to play the new bull market. don't want to lose sight of that. maybe it depends on this conversation about health care, "kudlow report," we will be right back.
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click today. we're talking about president obama selling health care at a town hall meeting and the great debate. we have kelley ann, keith and david limbaugh. before we reconvene, i want to put up on the board, health care insurance companies have done very well the past month. interesting, united health care, 12.97%, humana, 12.42%, aetna 7%
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and wellpoint, up. all four indicating the government won't pass. if that won't pass, keith, what will happen. >> it will pass. there will be health care reform this year. >> will the government insurance plan go through. >> it will include some sort of competitive element whether government option with government insurance or non-profit co-op. you have to do something to drive down the cost. people talk about the expense of this program, you're talking about a trillion a lot of money over ten years, the federal government under george bush spent $800 billion in one day to bail out the banks. can't we spend a portion of that to bail out the american people. >> this will be a double. david limbaugh, interesting, the white house wants everyone to send in their fishy e-mails opposing it. keith hennessey who worked for bush sent in the strongsal testimo
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-- congressional testimony that said how much it will take to fund it. the cpo is the fishy one. >> we're always cry iing gus cr when george bush was trying to monitor terrorists. health care costs have required insurance companies cover all kinds of things like massage therapy, refuse, all these states have refused competition across state lines searly reduces competition and causes the big insurance companies to come to the to. these are government mandated programs caused costs to go up as have tax laws that required employer provided care and artifici artificially provided consumers thinking they're not paying for it when in reality we're all paying for it. >> i want to stay with the politics for a second. to some extent, isn't this
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health care plan in trouble, particularly the government insurance component because of the huge deficit, 13% gdp for this fiscal year, $800 billion in stimulus, $700 billion in t.a.r.p. people are worried about the size and scope of government, degree of control. we own general motors, you do, a taxpaye taxpayer, we own aig and citigroup and people don't want them to own aetna. is that an issue? is obama being hoisted on his own fiscal petard? >> it is. if you look at his approval ratings on fiscal issues, under 50% on anything fiscal, budget and health care and taxes. he's trying to put a trillion dollar anvil on top of the stimulus plus cap and trade and energy tax. had he led with health care with all the political capital he probably would have had a better
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shot. but people are saying the well is not just dry, the well is angry. >> could you comment on that? seems like at the very least, apart from merits or demerits of health care, the public is up in arms because they see too much government and too much control, too much change. is that one of president obama's problems? >> i think one of the problems is the people are believing the lies and right wing smear tactics. david didn't give an accurate assessment. i own a medical center and married to a surgeon in addition to being a radio talk show host. i know from whence i speak. one of the problems this is a health cost reform program and not a health care program. another thing is the lies, things being spread. sarah palin's facebook even though she's it in the grand scheme of health care and this country as former governor of the state of alaska and have to look at thely
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continuouslyinggousness of our society and visits to the emergency room and programs available for every drug out there. we haven't even touched upon this. health care reform is necessary for the wealth and health of this country or it's a train wreck. >> it's all about care. obama's going to decide who gets what. >> it's about greed. look how much the head of blue cross united health care and cigna and aetna make? it's about greed. >> david, how much of this is about sarah palin? i'm interested in this death board stuff, she puts it out there, it catches on all over the country. >> this is not about sarah palin i adore, this is about people and liberty. >> that's a lie. >> it's not just about costs, this is about liberty, a government takeover over one section of the economy. they will decide how much care we can reself-assessment let me finish. they will decide. obama has admitted he will base payment and bundle payment based on whether medical treatment is approved by doctors.
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then he has the audacity to look us in the face and say -- >> medicare -- >> leslie, great see you. i appreciate you coming back on the show. i'm flat out of time. have a little more stock market to do. kelley ann, leslie, david limbaugh and as always, keith boykin, coming up, i still say it's the new bull market, we have these dips and pullbacks, the dow off close to 100, i think a great chance to get back in because we have another 15, 20% to go. let's check in with my pal, dennis kneale. >> hey, larry, we're doing a speci special edition, take back the power, congress has gone wild. a federal judge imposed acquisition on wall street and people are tired of it and starting to fight back. >> we will be right back. much more on the stock market. please stay with us.
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obama's little green go-carts are getting a makeover from general motors unveiling its upcoming chevy volt electric car today.
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cnbc has the full details. >> reporter: larry here at general motors proving ground outside detroit says its chevy volt that goes on sale next year will get 230 miles an hour, since most will be electric powered, what will it cost if you charge it at home to drive 100 miles? assuming 11 cents per kilowatt-hour, general motors says it will cost u2.75 to go 100 miles or roughly three cents a mile. larry, that's the story from here in detroit, back to you. >> could be a big plus for gm. let's turn to the bull market. should you be a buyer or seller. to peter former international trade commission, chief economi economist. we have dan action contributor phoenix partner strategist and broker. hello, everybody. peter marici, i think you're the biggest bull out there. what are you thinking? a little pullback here?
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is the new bull market intact or what? >> we're intact. we will go forward from here. some adjustment expected. we had a sneeze on financials. the fact is financials are still way down since last november well below the average of the new york stock exchange, plenty of growth and still celebrating before january 1. >> dan, what's your take? i think you're on the other side? my take is there's fear driving this market higher right now and certainly taken a pause right here on the s&p, an inflection point in the market. fear was the same emotion that drove the selling at the january, february march lows here. to me, i actually see a very narrow rally. i don't see a rally nearly as broad as you like to see entering your new bull market, larry. >> i'm interested you're calling it a rally? is that how you're treating it? are you buying into this or not. >> the market clearly rallied.
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almost 50% off the lows. history tells me something different. i think back to march 2000 the top of the market, back to march 2003, the all time low as we look back over the last six or seven years, one thing that happened very interestingly, we made six lower loads in that three year period. during that time we had five 20% rallies. 20%. that would maybe cause you to call that a bull market. >> we had a good five year run. i understand but we had a heck of a bull market run for five years. rich, where do you come out? rich, you have your profits numbers that have been very helpful. your leading indicators are pointing to 2 or 3 or 4% economic growth. in order for this thing to collapse, you have guys saying you have to pull back by 15% or more or not a bull market. wouldn't we have to see a complete reversal of the
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economic stats? that's one of the things i'm looking for. you have to have a knee-knocking reversal of the economic recovery scenario? >> yeah, i go back to the point the recession we went through was not as bad as it looked, despite the fact we had negative 6% in the first quarter of 2008 and first quarter of 2009, what we were really going through is ordinary recession suddenly magnified by a financial black-out that caused everybody to panic. the black-out is over, on the pat to recover and finding the fundamentals were never as bad as they looked in the fourth quarter of 2008. i think the stocks have another 20% to go and think we'll see an s&p 1200 and the economic policy will probably cause a pause. >> or the risk. those policies could be overturned judging from some polls. on that 1200 s&p, we finished just below 1,000 today, what about the issue, michael darta
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raises this again, corporate bonds have rallied, corporate bond spread, ultimate credit spread, ultimate fear and risk spread. they're back to pre-lehman. 1200 on the s&p, which will be about 10 1/2, 000 on the dow. back to pre-lehman, can we get there? i think those suffering this pullback need to hear this. >> yes. i think if we had the stock market correction based on the recession prior to the financial black-out, it would have taken us from 1500 s&p to 1200 s&p. >> dan, real quick, thought, pre-lehman, yes or no? >> pre-lehman, that was 1200, we're 20% lower than that, probably appropriate level, down to 850 where we were a month ago. >> you're not saying 1200, don't believe the pre-lehman? >> we will go there inter, larry. >> i have a hard break. stay where you are, i will ask our panel about tomorrow's
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federal reserve report. will the fed be stock market friendly or not? mr. evans? this is janice from onstar. i have received an automatic signal you've been in a front-end crash. do you need help? yeah. i'll contact emergency services and stay with you. you okay? yeah. onstar. standard for one year on 14 chevy models. shopping online can help save. doing it with bank of america can help save a lot more. up to 20% cash back from over 300 online retailers with our add it up program. just sign up and use your bank of america debit or credit card when you shop online. it's one of the many ways we make saving money in tough times a whole lot easier.
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we're talking new bull market. peter maurice circumstance can you be our fed watcher tonight. will tomorrow's statement at 2:15 be stock market friendly? >> i think so. we will continue the policy we have. the fed has already started to pullback a little on the crit gives the banks because it doesn't need it as much.
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they will continue to stay in the market and support fannie and freddie and buy treasuries. the interest rate will not change. the banks will continue to have very low cost of capital. >> i will slap up a chart on the board. today's productivity report was gang busters. 6 1/2% for the quarter, a recessionary quarter and for the last year, up about 2%. for the last two years during this recession, up 2%, peter. that's good for growth, good for prosperity, good for profits, too, is it not? >> absolutely. american businesses have been dropping their bottom line. what's more, during this recession, unlike past recession, they kept up their r & d, not just the chevy volt, we'll see lots of new products they can sell around the world and make lots of profits. this market can go forward even if the economy grows at 2, 2 1/2% a year, we'll go way up because of this. >> rich, one of the darlings of
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the market going back to early march has been tech. i know you basically like tech. i want to ask you about an important tech dissenter, you probably saw the "new york times" sunday with tom sibal. he's a long time tech guy and knows this stuff. he said all the new breakthroughs have been had. nothing new out there. he also said investment in tech used to run 20% per year, fr17% per year between 1980 and 2000. since 2000, only down 3% a year. here's a tech veteran and entrepreneur who said stay away from tech, all the new good stuff has been seen. >> in 1983, ken olson, the head of digital equipment corporation, the leading mini computer company riding high at the time said about this new technology called the personal computer, who would ever want one in their home? he said, as far as business goes, they're useless because
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you can't network them. tom has accomplished great things but it doesn't give him any special claim and may in fact bar him from seeing the next generation of technology in people. >> you're staying with tech? >> i'm staying with tech. >> probably when the black and white tv was invented, people said that's as far as we can go. >> yeah. technology people are always pushing the envelope. technology, viewers understand one thing, it moves at the pace of moore's law, new applications as a result. >> i wouldn't discount what tom sebal has to say, a very successful entrepreneur. >> dan, would you sell the qs? >> they're up 15%, goon little too far too fast. >> dougy would sell them also. great stuff. as always, be sure to catch dan on options action friday, new time is 8:30 p.m. eastern on cnbc.
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coming up, more of "the kudlow report." i'll be on "the call" tomorrow morning.